Insurance is a crucial investment for businesses of every size. Without it, you run the risk of suffering severe losses. In some cases, those losses might be sufficient to cripple your business. Suppose that a critical piece of equipment were to break down just as you’re experiencing a cash-flow crisis. When these problems happen to coincide with one another, it can be difficult to recover. But with the right insurance product, things can turn out rosy.
To make things just a little bit confusing, business insurance tends to come in a range of different forms. Let’s assess some of the more popular, and see which is right for you.
Small business insurance
For sole traders and small businesses, small business insurance is usually the preferred option. It tends to be specialised to the needs of these kinds of businesses, offering coverage against a broad range of risks. Insurance labelled in this way tends in practice to be a combination of different products designed to cover all of the risks that a small business might incur. For the avoidance of doubt, it’s worth poring over the fine print, and having a few questions to pose to your insurer.
Public Liability Insurance
If members of the public are going to be entering your premises, or you’re going to be visiting their home, then you need public liability insurance. This will protect you in the event that a member of the public should be injured by your actions – whether they’re a customer or not.
Public liability insurance will tend to cover you against damage to property, medical fees, compensation for pain and suffering, and just about every other cost that arises from a member of the public being injured. It’s available to businesses of every size and shape.
Income insurance
This is more accurately known as ‘loss of income’ insurance, or ‘business interruption’ insurance. If circumstances beyond your control intervene to prevent your business from operating, then your insurer will step in to cover your costs. This may or may not include things like government-mandated lockdowns – so read the fine print and make sure that you’re covered for every eventuality.
Employer’s Liability Insurance
This is what protects you in the event that an employee injures themselves or falls ill while working for you. Employers are obliged to protect the health and wellbeing of their staff. If you’re employing people who aren’t direct family members, then you’re legally required under the Employer’s Liability Act 1969 to take out this kind of insurance.
It will protect you from claims brought against you by your employees. These might relate to workplace injury, but they could equally well have to do with discrimination, sexual harassment, or wrongful termination of contract.
